Off-Balance Sheet Activities and Performance of Commercial Banks in Malaysia

Mohd Karim and Sok-Gee Chan

The IUP Journal of Financial Economics, 2007, vol. V, issue 4, 67-80

Abstract: This study analyzes how the off-balance sheet activities of the locally-owned commercial banks affect the banks' performance in terms of banks' exposure to various types of risks, bank's profit, and the banks' leverage. A panel data econometric regression has been done to achieve the objective. The results indicate that the relationship between the off-balance sheet activities and interest rate risk, unsystematic risk, and overall risk of the banks is insignificant. Nevertheless, the results indicate that market risk is significantly influenced by the off-balance sheet activities. In terms of banks' performance, it is found that the stock return is negatively related to off-balance sheet activities. Moreover, there is no significant relationship between off-balance sheet activities and return on equity, leverage, and liquidity ratio.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjfe:v:05:y:2007:i:4:p:67-80

Access Statistics for this article

More articles in The IUP Journal of Financial Economics from IUP Publications
Bibliographic data for series maintained by G R K Murty ().